Smallholders’ Challenges: Realizing Peri-Urban Opportunities in Bengaluru

Meenakshi Rajeev and Christoph Scherrer
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Meenakshi Rajeev: Centre for Economic Studies and Policy, Institute for Social and Economic Change, Bengaluru 560072, India

Sustainability, 2021, vol. 13, issue 18, 1-18

Abstract: Urban expansion creates potential for increased incomes among previously rural smallholders from sources other than traditional agriculture. Harnessing this potential, however, requires investments into agricultural upgrading or non-farm activities. The article addresses the question concerning to what extent these investments are realised in the peri-urban space of Bengaluru. Its answers are based on a review of the literature and extensive field surveys in two differentially developed districts assessing the smallholders’ economic situation in 2019 and as a recall in 2009. Our findings are that only a few smallholders were able to realise the peri-urban opportunities. Household income increased in real terms only by a little, especially from farming. Instead of a traditional farm to non-farm production linkage, surpluses from the non-farm sector were seen to meet the working capital needs of the farm sector. While physical access to formal financial institutions has significantly improved, formal borrowing is dominated by small-sized loans from registered self-help groups or traditional priority sector loans. Only a few households took up non-farm activities as many others failed to obtain sufficient credit and lacked knowledge about remunerative non-farm projects. Overall, rising outlays for education and health services leave little resources for any productive investments.

Keywords: peri-urban; non-farm activities; formal credit; collateral; Bengaluru (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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